Risky Proposition: Terminating Employees Who Are Out On Leave

By Mark F. Kluger and William H. Healey

Rarely does a week pass without an employer asking us whether they can fire an employee who is out on leave. Because we want our clients to be happy and like us, and because employers can fire anyone they want, our answer is always: “yes.” Before you question our professional judgment though, we usually add: “but you can get sued for that” because employees, of course, can always sue anyone they want.

The nearly universal desire of employers to terminate employees while on leave is a phenomenon. We often hear, “she is out on maternity leave, do we have to take her back?,” or “he went out for surgery and we discovered that we didn’t need him anyway,” or our favorite, “he is recovering from a work-related injury but he’s been a terrible for ten years.” What causes employers’ sudden motivation to fire employees who are out on leave? Although we are lawyers not psychologists, we do have some insights.

There are definitely circumstances in which a leave sheds light on overstaffing or redundancies in the workforce. In fact, inefficiencies in process are often masked by business-as-usual routines. Pulling a player out of the game can reveal them. Unfortunately, even though that can surely be a legitimate non-discriminatory business reason for making a change, it will nonetheless be an uphill battle against a claim of retaliation for an employee exercising their rights under state or federal medical leave acts, workers compensation laws or the Americans with Disabilities Act and its state equivalents. The only time an employer has a fighting chance under these circumstances is if it has a reduction in force. But even then, an employer must be able to demonstrate that the employee who is out on leave would have been included in the RIF had he or she been actively at work. That is not so easy.

Equally as common as the revelation of overstaffing is employers’ spontaneous discovery of intolerable performance the moment the employee walks out the door, which is often followed by the desire to lock it behind them. Although we never doubt the genuineness of an employer’s motive to rid themselves of a poor performer, it is the timing that is problematic. There are few circumstances in which a termination for poor performance executed during a statutory leave will not look retaliatory. If an employee is performing so poorly that termination is the best remedy, employers should not wait. Unfortunately, it is human nature to avoid confrontation (that’s all the psychology we know). For that reason, the can often gets kicked down the road until that totally convenient time when nobody has to look into the eyes of the employee being terminated. Sorry, but that is not the best performance management system.

Many employers do discover genuine performance issues, about which they were unaware, before an employee is on leave. That usually occurs because someone else has to get involved in that employee’s work or looks at their files or computer. When confronted with those situations and an employer’s question about potential termination, our analysis typically focuses on the seriousness of the performance issues discovered. For example, it is an easy call when the employer discovers embezzlement no matter what the nature of the thief’s leave. But when it is discovered that the employee messed up some orders or did not return calls, factors such as the cost or loss to the employer must be assessed and measured against the possibility of a lawsuit before making a recommendation. In those situations, we will also want to know whether other employees, who were not on leave, were terminated under similar circumstances.

Overall, terminating employees while they are on leave is a risky proposition. Although there are times when such action is necessary and defensible, we typically do not recommend it. Often an employer’s desire to terminate while an employee is on leave sheds light on a failure to engage in proactive performance management. There is no substitute for making those tough decisions and following through before an employee is in a protected status, and thereby armed with a discrimination and/or retaliation claim. Otherwise, it might just be safer to move and leave no forwarding address.